Prism Clinical Imaging Inc. has received a $1.6 million grant to further develop a technology it says is revolutionizing treatment for brain cancer patients.

Researchers affiliated with the Elm Grove software company also will use the money for a controlled study evaluating the effect of its technology on about 50 patients a year at Froedtert Hospital, the Cleveland Clinic and Radiology Associates in Sacramento, Calif.

Prism's software helps doctors view information from different types of magnetic resonance imaging machines, whose pictures can show things like which part of the brain controls finger movement or how aggressive a tumor is.

That helps doctors better diagnose and treat tumors and other diseases of the brain, said Paul Schmelzer, Prism's chief executive officer.

A neurosurgeon might use the software to plan a surgery to remove as much of a brain tumor as possible without impairing a patient's brain function, he said.

The three-year Small Business Technology Transfer grant, to be announced Monday, is from the National Institutes of Health.

"What this will do is give a big boost in terms of adding new features to the software, specifically to help preserve vision and movement" in patients undergoing brain surgery, said Edgar DeYoe, a radiology professor at the Medical College and a Prism co-founder.

"When you get right down to it, it's all about not cutting in the wrong place," DeYoe said.

The study will help Prism prove its software makes a difference and convince insurance companies to pay for treatments associated with it, DeYoe said.

Clinical data collected at Froedtert over the past three years shows patients undergoing Prism software-assisted brain tumor surgery there had a significantly better chance of avoiding neurological side effects than the national average, DeYoe said.

The $1.6 million award is the fifth federal grant the 5-year-old company has received, and it brings to $1.9 million the total amount Prism has pulled in from federal grants, Schmelzer said.

Prism, formerly known as Kyron Clinical Imaging, also received a $1.5 million private equity investment from Froedtert Hospital in 2006.

Prism has seven full-time employees and about 10 sites using its software, Schmelzer said. Along with the grants, the company is using revenue from software sales and consulting services to operate, he said.

A struggling economy has slowed Prism, but there are solid opportunities for growth next year, he said.

The company has three more grant applications pending, one of which involves technology dealing with an area outside of the brain and a market that's much larger than the brain tumor market, Schmelzer said.